BOONE—A combined emphasis on manufacturing efficiency and customer service is needed by business managers in today’s rapidly changing business environment.
“Increased global competition, extended supply chains and increased customer awareness are forcing businesses to find new ways to compete effectively and efficiently,” said Richard E. Crandall, coauthor of the second edition of the book “Vanishing Boundaries: How Integrating Manufacturing and Services Creates Customer Value.” Crandall is a professor in Appalachian State University’s Walker College of Business. His son, William R. Crandall, a professor of management at UNC Pembroke, also is coauthor of the book, which addresses this new approach that is needed for businesses to gain a competitive edge in a global business environment.
Published by CRC Press, the revised edition has added case studies on G.E. Aviation, Hewlett Packard, Amazon and UPS to illustrate blending manufacturing with business services offerings. Its target audience is business managers and owners of both manufacturing and service companies seeking to improve their businesses.
Manufacturing companies and service companies are becoming more alike as the boundary between the two areas is vanishing. , Richard Crandall said. “Manufacturing companies are adding more services, and service companies are using manufacturing techniques, such as lean and Six Sigma manufacturing principles designed to increase efficiency and reduce waste.”
Crandall cited G.E. Aviation as an example of a company that has successfully blended manufacturing with customer service.
“G.E. not only manufactures jet engines, it also services those engines. “This is a good example of how service blends with manufacturing,” he said. The authors write that, “Manufacturing companies are becoming more customer-focused and recognizing the need to supplement their products with a service package. In many cases, adding services generates more revenue and income for companies.”
Other companies that have embraced a hybrid business model and are highlighted in the book’s case studies are Amazon, with its extensive fulfillment network, and Google, which acquired Motorola in 2012, adding products and mobile device patents to its portfolio.
Crandall also pointed out that when Hewlett Packard focused on services that supplemented their product line, the company did well. “When they moved into services that were less directly connected to their hardware, the results were disappointing,” he said. This lack of product and service cohesion, coupled with the turnover of several CEOs, resulted in a period of turmoil that included a change from a product-oriented company to a software-oriented business and, more recently, a return to a product focus, he said.
“The bottom line is, if manufacturing companies provide services that support their products, that’s a valuable addition. When they move into services that are less directly connected with their products and in areas in which they don’t have expertise, it doesn’t work as well,” Crandall said.
Conversely, service companies have found that in order to improve profits, they can use various process improvement and quality improvement techniques pioneered in manufacturing. For example, the healthcare industry appears on the threshold of making significant improvements in the areas of materials supply chains and quality.
“That’s the basic theme of the book,” Crandall said. “Manufacturing companies are adding services that fit their products, and service companies are using techniques developed in manufacturing to improve their services. In short, they must learn from each other.”